A Rollercoaster Week At The CSE
Posted 3,May

By Chehan Jayasuriya

In Local News

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The Colombo Stock Exchange (CSE) experienced a roller coaster ride last week.

 Trading at the CSE was halted from the 11th to 18th of April due to Sinhala and Tamil New Year, while the market was closed from 18th to 25th of April due to the CSE claiming investors’ need for a cool-off period, given the significant bearish trends witnessed in the market previously.

Since its free float in March, the Sri Lankan Rupee has depreciated by over 75%. This, along with the 7% policy rate hike declared by the Central Bank of Sri Lanka (CBSL), added to the negative sentiments in the market. Further adding to negative sentiments are the soft default announced by the CBSL and the deadlock between the Sri Lankan President and Prime Minister, with the latter refusing to step down from his position.

Trading lasted less than 3 minutes on Monday the 25th of April, the first day the CSE opened after a break of two weeks. The ASPI dropped by 500 points as soon as the market opened while losing a total of 7.64%, or 621.40 points, to close at 7,513.85 points. The S&P SL20 fell 7.06% within mere minutes and lost a total of 10.23% or 268.36, to close at 2,355.54 points. Trading was halted due to the activation of the 10% circuit breaker, triggered by the S&P SL20 dropping over 10%. Turnover for the day was 253 million LKR, a mere fraction of this year’s daily average of 4.6 billion LKR. Expolanka, Commercial Bank PLC, and John Keells Holdings were seen dragging the market down on Monday.

Trading on Tuesday showed no improvement over Monday. Trading on Tuesday lasted less than 5 minutes, as the 10% circuit breaker was activated with the S&P SL20 over 10% for the day. The ASPI dropped 629.84 points to close at 6,884.01 points. Day’s turnover was 800 million LKR.

The market rebounded sharply on Wednesday, with the S&P SL20 gaining 8.87% or 188.57 points to close at 2,314.53 points. The sharp hike followed the overwhelmingly bearish trend in the market in the previous couple of days. Day’s turnover was 1.15 billion LKR, with Expolanka, Browns Investment, and Hayleys contributing to the uptrend.

Thursday was another green day for the market, as bargain hunters looked to steal solid counters at steep discounts. ASPI gained 330.91 points to close at 7,611.43 points, while the S&P SL20 gained 6.24% or 147.02 points to closer at 2,503.72 points. The day’s turnover was 2.9 billion LKR, with trading boosting the market cap by 21.1 billion LKR.

Positive sentiment in the market eroded considerably on Friday as bargain hunters looked to clock profits on equities bought at discounts. Both the indices gained marginally, with the ASPI gaining 12.83 points and the S&P SL20 gaining 5.51 points. Day’s turnover was 2.4 billion LKR, more than half of this year’s daily average of 4.5 billion LKR.